Reports rattle blue chips

EXAMINER NEWS SERVICES

Published 4:00 am, Monday, June 30, 1997

NEW YORK - Blue-chip stocks closed lower Monday after being rocked by a weak bond market, some troubling economic reports and last-minute juggling of positions by investment managers on the final day of the second quarter.

Based on early and unofficial data, the Dow Jones industrial average ended 8.14 points lower at 7,679.58.

But in the broader market, advancing issues led declines 15-12 on active volume of 541 million shares on the New York Stock Exchange. The Nasdaq Composite index ended 3.91 points higher at 1,442.06.

The blue-chip barometer was down more than 75 points in the morning after surrendering a 25-point gain, making it the sixth straight session with a 100-point swing in the Dow.

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The Commerce Department reported that new home sales shot up 7.1 percent in May. Economists had expected a much smaller rebound from April's 8.1 percent drop in new home sales. A Midwest trade group, meanwhile, reported a sharp increase in factory activity during June in that key manufacturing region.

But in another report supporting arguments that that the economic pace has eased enough to keep inflation in check without higher interest rates at the Federal Reserve, the Commerce Department said consumer spending rose a modest 0.3 percent in May. That helped ease worries that strong consumer confidence hasn't translated into surging demand, which could aggravate inflationary pressures at the nation's factories.

Although many analysts believe Fed officials will leave the central bank's key lending rates rates unchanged when they meet Tuesday and Wednesday, some fear Fed chairman Alan Greenspan will make good on his threats to act preemptively.

Financial markets reeled after the Chicago Purchasing Manager's Index for June jumped to a 61.5 reading compared with 56.8 in May.

An hour before the close of trading, the Standard & Poor's 500 list was up 1.76 at 889.06, and the NYSE composite index was up 0.49 at 463.79. The American Stock Exchange composite ndex was up 1.92 at 621.99.

Among leading technology issues, Compaq Computer was up 2 9 / 16 at 101 1 / 16 on the NYSE, while Dell Computer was up 1-3/8 at 117-1/2 in Nasdaq trading.